The Direct and Indirect Effect of Credence Attributes on Consumers’

Attitudes towards Agri-Food Products

Domenico Dentoni, Glynn Tonsor, Roger Calantone, Chris PetersonProduct Center, Department of Agricultural, Food and Resource EconomicsEli Broad Business SchoolMichigan State University

Credence Attributes• A set of different attributes with the same nature

– Organic– Traceability– Fair Trade– Locally-Grown– Place-of-Origin– Animal Welfare

Commonalities:• Used to signal quality of products• Demanded by growing market segment • Desired with different motivations

• Information Economics• Consumer Economics• Consumer Psychology

Literature Review• Ag Econ and Marketing Research on Credence Attributes

Direct and Indirect Effect of Credence Attributes (Van der Lans et al., 2001)

Credence Attributes

Consumer WTP for a Product

Consumer Attitudes toward a Product

Perceived Quality

Consumer Attributes

Indirect Effect Direct Effect

2 Gaps in the Literature1) Impact of Adding a CA on Consumers’ WTP for a Product

BUT

Seller’s Claim on CA ≠ Buyer’s Belief in the Presence of CA

2 Gaps in the Literature2) Impact CA on WTP mediated by Consumers’ Perceived

Quality

BUT

Perceived Quality ≠ Consumers’ Beliefs in the Presence of Specific Product Attributes

Consumer Attitudes

Perceived Quality

Bel. FreshBel.

Family Business

Bel. Local Economy

Conceptual Framework

Learning Theory (Fishbein, 1967); Attributes as Cues (Rao and Monroe, 1989).

Seller’s CA Claim

Cons’ CA Belief

Sources of Information

Search Attributes

Cons’ Attitude

Cons’ EA Beliefs

Cons’ OCA Beliefs

Direct Effect

Indirect Effect

Another Paper

Research Question and Hyp.

• Do Credence Attributes have a Direct Effect on Consumer Attitudes or is this Effect Mediated by Consumers’ Beliefs in the presence of Experience or Other CAs?

Cons’ CA Belief

Cons’ Attitude

Cons’ EA Beliefs

Cons’ OCA Beliefs

Direct Effect

Indirect Effect

H1

H2

H3

Cons Familiarity

Cons Familiarity

H4

H4

Implications• Knowing consumers motivations -> Targeted promotion • Actors promoting CA have “opinion leaders” as potential partners!

Consumer Attitudes

Bel. Eco-Friendly

Bel. Family Business

Bel. Local Economy

Cons. Belief Locally-Grown

Bel. Fresh

MethodologyStructural Equation Model• Path Analysis, to estimate Beliefs (mediators) and Familiarity (moderator)• Factor Analysis, to measure Consumer Attitudes (latent variable)

Product and CA• Apples• Locally-Grown

Sample (Pilot Test)• 40 MSU students• Will be 220 MSU students, randomly selected• Why student (vs. non-student sample)?

Experiment Procedure

On-Line Questionnaire

Pre Test, to identify mediators:• Beliefs EA -> L-G Apple is sweet, good flavor, firm• Beliefs OCA -> L-G Apple is healthy, no chem residues, no diseases

Pilot Test, measuring:• 2 Treatments (Locally-Grown Claim; a Picture)• Beliefs (1 Likert-Scale Item)• Attitudes (4 Likert-Scale Items)• Familiarity (10 items = score)

Results

Dep Var Independent Variables E R2

BLG .189 LGCLAIM .206 LGPIC .092 FAMLG -.027 FAMPIC -.155 FAMPICLG

.942 .112

BHEALTH .404BLG .237FAM -.286PIC .301FAMPIC -.313FAMBLG .719 .484

BPEST .339BLG .269FAM -.376PIC .114FAMPIC -.484FAMBLG .536 .713

BCHEM .535BLG .220FAM -.222PIC .114FAMPIC -.425FAMBLG .652 .575

BGFLAV .484BLG .316FAM -.271PIC .254FAMPIC -.484FAMBLG .548 .700

BSWEET .467BLG .329FAM -.370PIC .244FAMPIC -.476FAMBLG .506 .744

BFIRM .441BLG .231FAM -.435PIC .349FAMPIC -.395FAMBLG .542 .707

ATTITUD .146BLG .106 BHEAL .265 BPEST -.073 BCHEM .219 BGFLAV . .164 BSWEET .230 BFIRM

.486 .764

CHI-SQUARE = 1467.214 WITH 124 DEGREES OF FREEDOM. P-VALUE FOR CHI-SQUARE = .00000; ROOT MEAN-SQUARE ERROR OF APPROXIMATION (RMSEA)= .383.

Results

• Locally-Grown DOES have both Direct and Indirect Effect• Familiarity DOES act as negative moderator

Cons’ Bel. Locally Grown

Cons’ Attitude toward

an Apple

Bel. NO Pests and Diseases

Bel. Good Flavor

Direct Effect

Indirect Effect

Cons Familiarity

Cons FamiliarityBel. Firm

Conclusion• Results Preliminary

Conceptual Contribution:• Seller Claim ≠ Buyer Beliefs• CA is cue of other Attributes vs. Perceived Quality• Familiarity moderates Indirect Effect of CA

Methodological Contribution:• SEM vs. Economic Valuation Methods

Applications on Other Products, CAs, Markets

…Thank YouWe greatly value your questions, comments and suggestions.